UK fashion brand French Connection has confirmed that its full-year profits will now be under previous estimates, after seeing sales slip further during the Christmas period.
The company will publish full results for the 12 months ending January 31st 2012 next month, with its profit before tax for the period expected to be in the region of £4.7 million, down from £7.3 million for the previous year.
After a strong start to the financial year, trading fell off in the second half and sales over the Christmas period were reportedly down on the same period last year.
A statement fro the retailer read: “Trading in our retail stores in UK/Europe was disappointing in the early part of the Autumn/Winter season and this continued through the Christmas trading period.
“The effect of this has been to negate the growth in like-for-like sales achieved in the first half of the year and to cause the gross margin to be lower than expected.”
French Connection has recently turned itself around after several years of decline which saw the group post heavy losses in years ending in January 2009 & January 2010, which makes this backwards step even more disappointing.
However with growth in many areas of the business and it expecting to finish the year with net cash reserves of around £33 million and no debt, the company remains in a relatively strong financial position despite the difficult trading conditions.
“Wholesale deliveries in the second half of the year have shown good growth over the previous year and the forward orders for the Spring/Summer season are ahead of this time last year,” the group’s statement continued.
“Our international operations and brand licensing partners continue to perform strongly.”